Cristina Odone is a journalist, novelist and broadcaster specialising in the relationship between society, families and faith. She is the director of communications for the Legatum institute and is a former editor of the Catholic Herald and deputy editor of the New Statesman. She is married and lives in west London with her husband, two stepsons and a daughter. Her new ebook No God Zone is now available on Kindle.

What happened to the bonfire of red tape, Mr Cameron?

Picture this: you and your business partner have opened a deli in Soho. It's a great little place, full of delicacies from France, Italy and Spain. You serve the most delicious caffe latte and the most scrumptuous panini. Customers start queuing outside your door. Success is in the air. You are approached by money men: they want you to expand your hole in the wall into something more sophisticated – and are even talking of helping you open branches in Brighton and Bath.

But you don't want to. It's not that you are afraid of hard work: you're afraid of hiring staff. You'd rather enter a minefield than the thicket of employment regulations that loom ahead. Part-time, maternity, over-time, EuropeanWorking Time Directive, not to mention the threat of unlimited damages if a disgruntled employee decides to go after you…. hell, no, who'd want to go through that?

This thinking, now common among small businesses, is keeping unemployment high and the economy stagnant. The Coalition came into this town, guns blazing and shooting from the hip with promises of "a bonfire of red tape". What happened?

Firms can't sack slackers. But it's worse than that. If your lazy, surly, dispiriting member of staff is cunning and vengeful, they can bankrupt you in no time by filing charges against you as a boss. The compensation limit an employee can claim for unfair dismissal has just gone up from £68,400 to £72,300; but if your staff has a discrimination-based case against you, there is no limit to how much in damages they can claim. Scary stuff, for any prospective boss. Already, it typically costs firms an average of £8,500 to defend a case at a tribunal, and an average of £5,400 to pay off an employee.